Plan for Costco gas pumps wins state approval

Jan. 24, 2013

Debra Bell with Trudell Consulting Engineers (center) explains the site map for the proposed gas pumps at Costco in Colchester during a site visit with the Act 250 district commission on Wednesday Aug. 1. / EMILY McMANAMY/Free Press

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Free Press Staff Writer

COLCHESTER — Costco won big Thursday when the state gave the retail giant permission to install gas pumps at its Colchester outlet — but don’t expect to fill up your tank there anytime soon.

Opponents say they will appeal a regional commission’s granting of a land-use permit under Vermont’s Act 250 development control law. The filling-station proposal already is tied up in the Environmental Division of Vermont Superior Court with litigation involving the stormwater and local development review approvals for the gas pumps.

Costco’s seeking permission for gas pumps is among the most closely watched development proposals in Vermont. Costco’s gasoline in Connecticut and Massachusetts runs about 15 cents per gallon less than the state average, and advocates say roughly the same could happen if Costco starts selling fuel here.

Gas prices are a sore subject in northwestern Vermont. Many motorists and others, including Sen. Bernie Sanders, I-Vt., say fuel prices are artificially inflated in this part of the state. The House Transportation Committee held a hearing on the matter Tuesday.

“If this lowers the prices, I’m all for it,” said Mike McGuiness of Fairfax, pumping gas Thursday evening at a Shell station on U.S. 7 a little south of Costco.

McGuiness said he stops at the Shell for gas occasionally on the way home from work because the fuel is less expensive there than at other service stations in Chittenden County. Still, he said, he’s noticed lower prices elsewhere in Vermont, and he said he suspects gas prices in Chittenden County are artificially high.

At this week’s House hearing, Skip Vallee, owner of the Maplefields chain of gas stations, blamed the relatively high prices on high property taxes and minimum wages in Vermont, and on higher wholesale prices than in other parts of the region.

Sanders has led the skepticism of the high prices, saying a lack of competition is forcing prices higher. He has said repeatedly that competition from Costco might help the situation, and he said so again Thursday.

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“If Costco’s application to sell gas at its store in Colchester is finally approved, I hope and expect that gas prices throughout the region will go down, saving families a substantial amount in what they pay at the pump,” Sanders said in a statement.

Notice that Sanders said “if” the Costco application is approved. That’s because the proposal still has a lot of hoops to jump through, even with Thursday’s decision favoring the project.

Vallee and other local gas-station owners have fought Costco, mostly citing traffic concerns. One of Vallee’s Maplefields outlets is just up the hill from Costco. He said Costco’s gas pumps would increase local traffic, further gumming up the already congested and hazardous interchange nearby of Interstate 89’s exit 16 and U.S. 7.

Vallee, via email, said he was buoyed by Thursday’s decision from the three-member District 4 Environmental Commission, because it included a dissenting opinion. Commission member Jim McNamara said planned road improvements and Costco’s agreed-upon financial contribution toward the work is inadequate and won’t fix the traffic woes.

Consumers, though, said they hope Costco can have its pumps up and running soon.

At the Maplefields gas station just up Mountain View Road from the discount retailer, Zev Werts reacted with delight to news of the Act 250 approval. “It’s fantastic,” he said, though he acknowledged that appeals could delay the new pumps.

“They have more purchasing power than local dealers,” he said of Costco. “It should drive prices lower.”

As for the traffic nearby, Werts said the intersection was a mess with congestion, but the damage is done: The delays at the stoplights are inevitable with or without Costco. “I don’t think it’s going to be any worse,” he said.

Mark Hall, an attorney with Paul, Frank and Collins, representing Costco, said the Environmental Court will hold a conference Jan. 28 to decide whether to combine the Act 250, stormwater and local development review approvals under one umbrella or keep them separate.

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Commission members acknowledged in the decision that the approval on the traffic criteria for the proposal was partly a departure from past Act 250 practices.

In cases where escalating development causes increasing traffic congestion on nearby roads, a new building proposal that puts congestion “over the edge” into unacceptable levels would bear the entire cost of all necessary road improvements to fix the problem.

In the case of the Costco proposal, the company will pay a portion of the estimated $5.1 million it will cost to improve the local roads. The retail giant will front $720,000 to start the road improvements quickly, then eventually get reimbursed for all but about $362,000.

The Costco gas station also would not be allowed to open until the Vermont Agency of Transportation submits a land-use application for its proposal to reconfigure the Exit 16 interchange to make traffic flow more efficient.

Despite the looming appeals and the road-improvement costs that Costco would incur under the land-use permit, Hall, the lawyer for the company, pronounced himself happy with Thursday’s outcome.